Statutory licence renewal conditions and lawful appropriation of deposits barred refund and supported refusal of FL-3 renewal.

A sum deposited under interim orders and later appropriated towards outstanding interest could not be refunded merely because the appellant subsequently availed an amnesty scheme covering remaining liabilities; the lawful appropriation stood, and the amount was not treated as lying in suspense. The Court also upheld refusal of FL-3 licence renewal where abkari arrears remained against one partner, holding that the proviso to Rule 13A(5) required clearance of at least 50% of arrears and that partnership arrangements could not override the statutory condition. Renewal was therefore validly refused.

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Issues: (i) whether the appellant was entitled to refund of Rs. 50 lakhs deposited pursuant to interim orders after availing the Amnesty Scheme of 2008; (ii) whether renewal of the FL-3 licence could be refused on the footing of abkari arrears standing against one of the partners under the proviso to Rule 13A(5) of the Foreign Liquor Rules.

Issue (i): Whether the appellant was entitled to refund of Rs. 50 lakhs deposited pursuant to interim orders after availing the Amnesty Scheme of 2008.

Analysis: The deposit made under the interim orders was found to have been appropriated towards outstanding interest under the applicable abkari rules. The subsequent amnesty obtained in 2008 related to the remaining liabilities then outstanding and did not undo the earlier lawful appropriation. The certificate produced by the appellant itself showed the outstanding principal and interest position, and the Court held that no basis existed to treat the amount as lying in suspense or to direct its return.

Conclusion: The appellant was not entitled to refund of Rs. 50 lakhs.

Issue (ii): Whether renewal of the FL-3 licence could be refused on the footing of abkari arrears standing against one of the partners under the proviso to Rule 13A(5) of the Foreign Liquor Rules.

Analysis: The proviso required clearance of at least 50% of the abkari arrears before renewal. The Court held that the partnership arrangement could not override statutory restrictions, because partnership arises from contract and not from status, and firm assets and partner liabilities could be looked to under the Partnership Act. Since the arrears of one partner were not in dispute, the authorities were justified in insisting on compliance with the proviso before renewal.

Conclusion: Refusal of renewal on account of the partner's arrears was upheld.

Final Conclusion: The statutory conditions governing excise licence renewal were enforceable against the partnership firm, and the earlier deposit could not be reclaimed after lawful appropriation towards interest and later amnesty benefits.

Ratio Decidendi: A statutory condition for renewal of an excise licence may be enforced against a partnership firm on the basis of arrears attributable to a partner, and a sum already lawfully appropriated towards interest cannot be reclaimed merely because a later amnesty scheme wipes out remaining dues.

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